DENVER – Three men were recently sentenced for implementing a mortgage fraud scheme, United States Attorney John Walsh, FBI Special Agent in Charge James Yacone and IRS Criminal Investigation, Special Agent in Charge Sean Sowards announced. U.S. District Court Judge Philip A. Brimmer sentenced Cedric Lipsey, age 36, of Denver, a licensed real estate agent, to serve 63 months in federal prison. Losses to the mortgage lenders caused by the fraud totaled over $4.2 million. Lipsey was also ordered to pay restitution to the victims of his crime. Judge Brimmer sentenced Philip A. Martinez, age 36, of Denver, a mortgage broker, to serve 50 months in federal prison. Martinez was also ordered to pay restitution to the victims of his crime. And in a separate but related case, Judge Brimmer sentenced licensed appraiser David Vukovinsky, age 49, of Castle Rock, to serve 12 months and 1 day in prison and pay restitution.

Lipsey and Martinez arranged to have a variety of fraudulent documents submitted to the lenders in support of the loan applications. These consisted primarily of documents purporting to show proof of the borrowers’ employment, proof of the borrowers’ assets, and sources of the borrowers’ asset, and incomes. The defendants also used forged signatures where necessary to facilitate the scheme. Furthermore, Lipsey enabled certain appraisers to create false reports which reflected that the subject properties were “comparable” to the higher quality or otherwise more valuable properties, when they were not.

“The conduct in this case is especially egregious because a licensed real estate agent, a mortgage broker and an appraiser worked together to defraud banks, the government, and the mortgage system generally, ” said U. S. Attorney John Walsh. “The work of the team that investigated and prosecuted the defendants, leading to their incarceration, is important to protect the integrity of the mortgage lending process. ”

“This sentencing is a strong reminder of how serious our courts consider this criminal activity, ” said Sean P. Sowards, Special Agent in Charge, IRS Criminal Investigation, Denver Field Office. “IRS Criminal Investigation is committed to identifying and pursuing individuals who through callous greed have contributed to the decline of our economy. ”

“The mortgage crisis has caused considerable harm to our Nation’s economy, ” said FBI Special Agent in Charge James Yacone. “The FBI will continue to investigate real estate and mortgage industry professionals who have ignored their fiduciary responsibilities and commit fraud for their own financial benefit. ”

The case was investigated by the Federal Bureau of Investigation (FBI), and the Internal Revenue Service – Criminal Investigation (IRS CI).